Colorado Governor John Hickenlooper’s compromise seems to have fueled the fire in the ongoing debate about fracking regulation, and more broadly about local versus state control. As noted in earlier posts, other groups including homebuilders join the oil and gas industry in its opposition to these measures.

Currently, 11 potential ballot measures are competing for interest-group money and Colorado voters. While some groups are looking to broadly ban fracking and other activities deemed unacceptable at the local government level, most are looking for more specific limitations on drilling. A central issue in the measures is the distance permitted between drilling rigs and homes. The state’s current regulations require a 500-foot buffer. Four of the proposals would increase setbacks for drilling rigs by distances from 1,500 feet to a half-mile–proposals that Hickenlooper recognizes would put the state’s economy at risk by eliminating almost 60% of drilling locations. Colorado has enjoyed an earlier economic recovery than many states in the union in large part because of the oil and gas industry.

Hickenlooper’s compromise attempts to find a middle ground but has effectively made no one happy. Although environmental groups argue the compromise proposal does not go far enough, his bill would permit local governments to enact health and safety standards more stringent than state rules, authorize local inspections of oil and gas sites, and authorize negotiation with operators for setbacks greater than 500 feet. While the “compromise” would allow drilling to continue, the measure imposes a level of uncertainty that could be untenable to companies as various measures imposed at the local level would likely trigger costly delays and legal appeals for companies.

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Colorado Governor Hickenlooper announced a proposed bill to allow local governments to set rules on noise and drilling setbacks, now at 500 feet, and to impose “reasonably necessary” moratoriums on drilling permits. Under the bill, local jurisdictions could also inspect drilling sites for regulatory compliance and recover those costs. Proponents of the legislation believe that while local governments would have greater control, they would not be permitted to ban drilling activity outright or implement rules so restrictive that they impede activity. Oil and gas operators could appeal rules they consider too heavy handed with the local jurisdiction, and if they aren’t satisfied, appeal again to a district court. The appeal process, however, is costly and time consuming and could derail a project and undermine its economic feasibility.

Opponents of the bill come not only from petroleum industry but from the greater business community, including vocal support from the Clolorado Association of Homebuilders. Even if a compromise bill is passed, it won’t address Initiative 75, previously discussed here, which business groups consider the most damaging of the various questions that could come to a vote.

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A Colorado Supreme Court ruling gives a green-light for petitions to circulate on Initiative 75. If approved by voters in November, the initiative would enable cities and counties to set their own rules for oil-and-gas drilling, regardless of existing state and federal laws.

Recall that in February, Colorado health and environment officials already approved new rules to limit air pollution from oil and gas drilling in the state, including a plan to detect and reduce methane emissions.

Initiative 75, as currently written, would reach beyond oil and gas companies and give local governments the right to prohibit many other business. This could create interesting bedfellows as the political opposition to the controversial measure grows.